Wall Street Plunges as Oil Prices Soar and Bond Yields Rise

Wall Street suffered its third consecutive day of losses on Tuesday, as rising oil prices and bond yields continue to weigh heavily on stocks.

The S&P 500 index fell by 0.7%, with the Dow Jones Industrial Average dropping 0.8% and the Nasdaq composite sliding 1%. The weak start to September follows a relatively positive month for Wall Street in August, where every major index notched gains.

Technology stocks were among the biggest contributors to the market's decline, with Nvidia falling by 1.5%, Amazon dropping by 1.9%, and Advanced Micro Devices giving up 2.4%. Their significant market values give them a considerable influence over the broader market's direction, particularly in light of their growth being heavily reliant on borrowing.

The ongoing sell-off in US government bonds is also adding to the pressure on stocks. The yield on the 10-year US Treasury bond rose to 4.79%, from 4.75% late Monday, while the two-year Treasury yield climbed to 4.39% from 4.34%. Rising yields signal that investors are demanding a higher return from Treasuries due to growing government debt and its associated risks.

The increasing cost of borrowing is having a ripple effect on investments, including stocks, making it more challenging for businesses to expand. Higher oil prices, which rose by 4.6% to settle at $94.65 per barrel, are also fuelling inflation worries and putting pressure on stocks.